How to find a nominee for unsettled block

Discussion in 'The Buying/Selling Process' started by aussie.aussie, 13th Mar, 2013.

  1. aussie.aussie

    aussie.aussie Member

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    How can we find a nominee for a block of land when settlement is close and what will be the consequences if we cant settle what legal actions a developer can take .
     
  2. Terry_w

    Terry_w Member

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    You will likely have to pay stamp duty as will the person you nominate.

    If you don't settle you will likely lose your 10% deposit and the developer could come after you for more if they sell the land at a lower price.

    You could appoint an agent to assist in finding a buyer.
     
  3. tobe

    tobe Mortgage Broker

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    Hi terry,
    i thought if they nominate for the same price they might avoid the second set of stamp duty? I thought it was only where a developer/builder was involved, or where the first purchaser was making a profit?
     
  4. Terry_w

    Terry_w Member

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    Hi Tobe,

    No not usually. It may be different in WA.

    In Vic there must be a written agreement between the nominor and nominee before the contract of sale is entered into or both will pay stamp duty. So someone couldn't sign and/or nominee and then find a new buyer without each being hit with stamp duty.

    That was the situation a few years ago when I did a few in Vic, but things may have changed.
     
  5. tobe

    tobe Mortgage Broker

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    interesting. I know builders used this ploy regularly up until July last year, that is, sign for a block, then nominate the eventual purchaser (who built on that block).

    In July builders and developers then became liable for another set of S/D, with a change to the regulations. But as far as Im aware in victoria a 'normal' purchaser can get away with just paying the SD once.....
     
  6. tobe

    tobe Mortgage Broker

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    In terms of consequences, the developer can sue you for the deposit, and any costs they incur up until they sell the block to a new purchaser (for a lesser price, you are liable for the diference).

    In practice, and in the past developers will return the deposit in a lot of cases, and not pursue legal action.
    a) large developers dont want to appear on a current affair sueing FHB's, new migrants etc
    b) purchasers (FHBs) dont usually have enough assets to sue for, and they are better off just relisting the block at a higher price.

    Note, recently, with the market in land now not being what it once was, developers might be a little more diligent in pursuing failed contracts.
     
  7. Corey Batt

    Corey Batt Finance Broker

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    Done all the time in SA as well, with developers selling off apartments. Don't think it triggered a second SD here though.
     
  8. Terry_w

    Terry_w Member

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